After months of hand-wringing over costs and benefits,
Home Depot
has shut the door on lower Manhattan.

Late last week, the company quietly killed its year-old plans to open a store that would have significantly changed the retail landscape at the convergence of the burgeoning SoHo and Tribeca neighborhoods.

The store was to be built out on three levels at 345 Hudson St., in an area known as Hudson Square that is experiencing a high-end residential revival.

The transaction was felled along with former Home Depot CEO Robert Nardelli. Sources say that Home Depot's top real estate executives were on their way to a New York airport and then to Atlanta, where Nardelli was scheduled to make his final decision on the store.

The call came en route informing them that Nardelli's days as the decider were over.

Of course, Nardelli had never been particularly effective in making a decision as far as this deal was concerned, which is why the lease was still unsigned a year after Home Depot had initially agreed to lease the space.

"We were pretty far into the deal," acknowledged a Home Depot spokesman. "But we no longer are pursuing that site. It is now a dead deal."

Sources say that Home Depot was apparently concerned about whether the location offered enough density to justify the cost of the store; the proposed 125,000-square-foot lease, at a "blended" rent of about $40 a square foot, had an aggregate value approaching $100 million over its 20-year term.

Nardelli's sign-off package after a few years as CEO: $210 million.

Home Depot is not done with New York City, of course. The spokesman noted that it is building out its store in East Harlem. "We'll continue to review possible opportunities in Manhattan, as well as our strategy going forward." A source close to the company said it is trying to "make sense" of the challenges the city poses.

Home Depot's decision could likely be a plus for Trinity. Jason Pizer, a Trinity Real Estate executive, said that the company's asking rents for the space have risen considerably since Home Depot first seemingly agreed to take the space. Ground-floor retail that would have gone for rents in the mid-40s range is now approaching $70, while the office rents have jumped to around $44 from $34 a year ago.

And who's biting?
CBS
has its eye squarely on the office space, although so does its former parent,
Viacom
. And retail mavens say that major art galleries, priced out of SoHo and West Chelsea, are real contenders for the ground floor retail.

Home Depot wasn't the only one worrying about the right mix for New York City.
Apple
, which has had a smashing success with its 24-hour operation at the General Motors Building, is backing off some grand plan to build a multi-level store on 34th St. between Fifth and Sixth avenues.

Sources say image-conscious Apple, which leased the space from a joint venture between SL Green Realty Trust and developer Jeff Sutton, has had second thoughts about the location's coolness and had plans to put the site up for sublease. Apple had planned a 30,000-square-foot, four-story store with about 75 feet of frontage along 34th St., and had signed up to pay rent of about $5.5 million a year. Sutton and
SL Green
control the space on either side of the parcel as well.

But real estate sources say that, from the start, Apple had doubts about the compatibility of its leading-edge image with that of middle-America 34th St., at least as it currently stands. While strong retailers like
Gap
,
American Eagle Outfitters
and Forever 21 are happily ensconced along the block, "unfortunately, a lot of the old 34th St.--third-rate tourist merchants and rip-off artists--still remain, says one long-time retail broker.

That doesn't mean that Apple's business wouldn't have been good. Retail experts believe the store would have done very well, but Apple simply wasn't convinced that the location wouldn't somehow tarnish its image. Like, say, backdated stock options?

Against the backdrop of unfolding C-suite recklessness with shareholder assets, these two tales of high-level caution offer a fascinating perspective on what may be a fading edge. That both Home Depot and Apple had the moxie to make major commitments to these extremely promising stores, but in the end were unable to follow through, speaks volumes about the challenges facing anyone in the search for a new way forward.